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The Appalachian 
Oil Field 



REEDER & COMPANY 
FINLAY 8c DAVENPORT 








the 

APPALACHIAN 
OIL FIELD 


With specialireference 
to its potentialities in 
view of present condit¬ 
ions in the oil industry 



REEDER & COMPANY 

60 BROADWAY NEW YORK 


FINLAY & DAVENPORT 

30 BROAD ST., NEW YORK 




V 


Copyright 1920 
Reeder & Co. 




©Cl. A 5 617 3 2 






The Appalachian Oil Field 


The World Demand for Oil 

It is well recognized that the petroleum situation 
is today of world-wide interest. 

Petroleum with its various by-products through 
the progress of invention enters usefully into mod¬ 
ern industry to an ever-increasing extent. So much 
is this true that the present has been called the 
Age of Oil by authorities well posted on conditions 
today. 

The point has in consequence been reached where 
the advancing rate of consumption of petroleum 
now threatens to outrun production; has in fact 
already done so, as far as the United States is con¬ 
cerned. It is this situation that lends special im¬ 
portance to a study of the available resources, the 
nature and capacities of the various petroleum 
fields, their possibilities for development, and the 
opportunities they afford for sound investment. 
The Appalachian Oil Field in this latter connection 



Consumption Cutstripping Production 

42 GAL.. 

BARR.EL>S 1911 1912 1913 1914 1915 1916 1917 1918 1919 
400,000,000 

376,000,000 

350,000,000 

325,000,000 

300,000,000 

275,000,000 

250,000,000 

225,000,000 

1 200 , 000,000 . J . 

Consumption- ”"■ Production-- 

_ D.L. 



























Fage Four The Appalachian 


will especially repay examination, particularly in 
view of certain elements of the situation which press 
more emphatically for attention as the struggle for 
oil becomes keener. 


Varied and Increasing Needs 

“Petroleum,” to quote Joseph E. Pogue, Chief 
Petroleum Technologist of the National Museum at 
Washington, D. C., “has a vital bearing upon mod¬ 
ern affairs, because it is the source of gasoline, 
upon which automotive transportation is dependent; 
provides kerosene, the most important illuminant 
outside of cities; yields fuel oil, from which the 
industrial activity of most of the country draws its 
energy; and supplies lubricating oils upon which 
the wheels of industry revolve. Petroleum is an 
energy resource which shares with coal and water¬ 
power the responsibility of activating the indus¬ 
trialism and transportation of modem civilization.” 

Daily new uses for oil are being discovered, so 
that, as Kenneth C. Heald, Assistant to the Chief 
Geologist of the United States Geological Survey, in 
a recent article said: 

“Upon the needs already established others are 
rapidly being superposed. More and more oil is 
being used by the railroads. New methods of fuel 
economy and increased production, dependent upon 
petroleum, are being perfected and put into opera¬ 
tion. The Shipping Board alone threatens to call 
for 200,000,000 barrels a year in excess of the 
present total output of fuel oil. The automobile 
industry is expanding marvelously and is being 
supplemented by the application of internal com¬ 
bustion engines to a multitude of other vehicles.” 





Oil Field 


Page Five 


Exploitation of Distant Fields 

It is illustrative of the pressure of the demand 
that enterprising companies are now pushing into 
countries removed from industrial civilization in 
their quest for oil. Various regions of Mexico, 
Colombia, northern Brazil, Venezuela, Bolivia, 
Mesopotamia, India, and the East and West Indies 
are being searched for oil, and their known petro¬ 
leum resources developed, often at great expendi¬ 
tures of capital and effort. The discouraging fea¬ 
ture surrounding operations in many of these fields, 
however, is the remoteness of these areas from the 
consuming centers of America and Europe. Heavy 
transportation charges must be paid before the oil 
is marketed, and as petroleum from many of these 
countries is of poor quality, with low gasoline con¬ 
tent, and is able to command only the lower range 
of prices for the product, profits from operation in 
these fields are often seriously affected. 


The Ideal Oil Field 

The elements of transportation charges, cost of 
drilling and operation and the quality of the oil 
likewise, of course, enter significantly also into con¬ 
sideration of our domestic fields and suggest com¬ 
parison of our various oil-producing areas. 

The ideal petroleum field, it is evident, is one 
showing steady production of high-grade oil (oil 
yielding high percentages of gasoline and kero¬ 
sene), available at small expense for development 
and located close to the centers of consumption. 
There is perhaps no oil field in the world combining 
these features so ideally as the Appalachian Field. 





Page Six 


The Appalachian 


Characteristics of the Appalachian Field 

This field has consistently produced for over 60 
years, with every evidence of permanency, oil the 
market price of which is higher than that of any 
other grade, yielding gasoline and illuminating oils, 
the most remunerative products of petroleum, in 
high percentages under ordinary refining methods. 
It is, moreover, located unusually close to the areas 
of consumption and to refining facilities, and yields 
its product at a low developing and operating cost. 

The mad scramble for oil in all corners of the 
world has had its effect in diverting public attention 
from this important field during the past few years 
and has led in some quarters to the overlooking 
of its fundamental advantages. The Appalachian 
Field, however, still among the leading producing 
areas in the United States, in the opinion of United 
States geologists, will continue substantially pro¬ 
ductive for another half century at least, and in 
view of its special characteristics deserves the care¬ 
ful study of the investor. 

Some History 

In the early story of the Appalachian Oil Field is 
recorded the opening chapter of America’s oil his¬ 
tory. The oil seepages in the Appalachian swamps 
were first spoken of by a Franciscan missionary in 
a letter dated July 19, 1627. This is the first re¬ 
corded mention of oil in America. About 1758 an 
account and map of the oil springs near what is 
now Oil Creek, Pennsylvania, was published by a 
Peter Kaln, who visited the region. 

In 1859 a man named E. L. Drake drilled the first 
successful well, striking oil at 59*4 feet. Drake’s 





Oil Field 


Page Seven 



The First Oil Well 


The man wearing the tall hat is E. L. Drake. In 
the background is the well which he drilled at Titusville, 
Pennsylvania, in 1859. This well flowed at 69/4 feet. 
Drake, an ex-railroad conductor, entered the oil business 
with James M. Townsend. They formed the Seneca Oil 
Company and marketed petroleum for medicinal purposes 
at $1 a gallon. Their initial success in striking this well 
brought an oil boom and prices dropped to $1 a barrel. 
As royalties on Seneca Oil Company’s lease contracts 
were 12 cents a gallon, the company was forced into 
bankruptcy and Drake died a poor man. 












































Page Eight 


The Appalachian 


well ushered in the now gigantic oil industry which, 
if present indications are a criterion, has not yet 
attained anything like its full dimensions. 

Extent 

The oil area known as the Appalachian Field ex¬ 
tends from western New York, southwest to north¬ 
ern Alabama. This area, covering thousands of 
square miles, is bounded on the north by southern 
New York, on the east by the Appalachian Moun¬ 
tains, and on the west by Ohio and Tennessee. The 
oil belt is broadest at the northern limit, where 
portions of the basin reach a width of 300 miles. 
From here it tapers gradually southward, until in 
northern Alabama it is less than 25 miles across. 

The Appalachian Oil Field embraces an unusually 
large area and remains after 60 years of continuous 
production one of the leading fields. Myron L. 
Fuller, in an address presented before the Geologi¬ 
cal Society of America, December 28, 1916, stated: 
“The production has been better sustained in the 
Appalachian than in any other oil field, and the 
drop is likely to be comparatively slow. There is 
little doubt that the field will still be materially 
productive at the end of 50 years from today if 
outside factors do not intervene.” 

Geology 

The oil in much of this field is found chiefly in 
anticlines, which are easy to locate and well defined, 

being exposed in cuts and creeks of the broken 
country. 

One of the geological phenomena noticeable in 
the Appalachian region which has bearing on the 
industrial development phases of the situation is 
the nearness of the pay sands to the surface of the 




Oil Field 


Page Nine 


ground. Oil lies so near the surface of the earth 
that early settlers frequently noted seepages in the 
swamp lands, and these are often mentioned in 
books written during Colonial and post-Revolution- 
ary days. 

In 1806 a well drilled by Ruffner Brothers at 
Salt Lick, West Virginia, reached pay sands at 68 
feet. Drake’s famous well, which brought an oil 
boom to the Appalachian Field, was drilled to a 
depth of 691/2 feet and flowed 1,200 gallons a day. 
The entire structure of the Appalachian Field is 
fairly well defined throughout. Oil is struck at as 
low a depth as from 100 to 200 feet. In the older 
regions deep well drilling is now in progress in 
several sections, the oil in the shallow pools having 
been drawn off. In Kentucky and other new areas 
of the field, oil has been struck in good quantities 
in sands as near as 150 feet to the surface. 

In the majority of oil fields the oil-bearing strata 
lie deep in the earth, being known as deep pay 
sands. Thus, in the north Texas and Mid-Continent 
fields wells are often drilled to a depth of 2,500 to 
4,000 feet before pay sand is reached. It is esti¬ 
mated that the cost of drilling a well in these fields 


Productivity leading American Oil Fields 

85%' 


APPALACHIAN= | 15% 


ILL-INDIANAr = 33 7 *% 




MID-CONTINENT- 34-% 


76 Wl 


NORTH TEXAS'=|n^% 
GULF COAST= f 
WYOMING- = 1Q4°% 




4.8- 8S % 


5b i4 


fr'0L?P%7 lllllllllllllllllllllM. 


(hm pleted Wells 
in Dish ids 10V*%> 


Legend. 

1 Dry Holes. MUM Producing U/ells.' 








































IiRAV/ff & COMPILED BY D.LEOfiARD Cr CO. HY. 




M1NKE0C A 




PIPE LINE 




r INOI*N* 


lokisianA fields 


AMERICAN OIL FIELDS 

From 1859 to 1876 practically all of the petroleum used in the United States came from Pennsylvania. In that year the Appalachian area 
was extended by the discovery of oil in West Virginia and Ohio. The following year, 1877, California entered the ranks of producing states with a 
small output. In 1893 the Lima-Indiana field was developed. In 1901 oil was discovered on the Gulf Coast of Texas. The Mid-Continent Field 
underwent extensive development in 1903. In 1912 Wyoming began production. The North Texas Field became a producer in 1917. 







































Page Twelve 


The Appalachian 





' < 
< i 4 


After a record of steady production dating from 1860 the Appalachian Oil Field 
continues to hold rank among the leading oil-producing areas of the United States. It 
is noteworthy that since 1915 production has taken another promising upswing. 














































































































Oil Field 


Page Thirteen 




is from $30,000 to $50,000, compared with a drill¬ 
ing' cost of $1,800 to $2,000 per well in the shallow 
Appalachian Field. 


Location 

The Appalachian Field possesses the unusual ad¬ 
vantage of close proximity to the principal petro¬ 
leum consuming markets of the United States. In 
addition to its location in the heart of the indus¬ 
trial section of America, the Appalachian Field is 
within short distance of the seaboard. 

Connecting the Appalachian Field with the sea¬ 
board and the great industrial consuming centers 
such as New York and Philadelphia are eight pipe 
lines, in addition to a network of railroads and 
canals which spread spider-web fashion throughout 
the thickly populated communities surrounding the 
Appalachian Field. As the cost of carrying the oil 
increases with distance, the shortness of these pipe 
lines contributes a material advantage in competi¬ 
tion with the vastly longer pipe lines of the West. 

Then again the oil in the Appalachian Field is 
located close to the great refineries of the East. 
These were established early in the development of 
the industry at centers such as Pittsburgh, for in¬ 
stance, and afford ample facilities. Even today oil 
is shipped to a considerable extent from Oklahoma 
and Texas to Eastern refineries. 

An incidental advantage of the field is its prox¬ 
imity to the principal base of supplies for oil oper¬ 
ations, the Pittsburgh area. In more distant fields 
trouble is frequently occasioned by difficulties in 
securing materials as wanted. 








Page Fourteen The Appalachian 


Production 

The Appalachian Oil Field has yielded oil since 
Drake’s strike in 1859, during which year 2,000 
barrels were produced. The following year produc¬ 
tion reached 500,000 barrels, from which it in¬ 
creased steadily, from 2,113,609 barrels in 1861 to 
30,221,261 barrels in 1882. A slight decline during 
the next few year$ was succeeded by a record out¬ 
put of 35,848,777 barrels for 1891. This figure was 
exceeded in 1901, when 36,295,433 barrels were 
produced. From 1904 to 1915 production ranged 
from 22,000,000 to 29,000,000 barrels annually, 
general industrial conditions and the law of supply 
and demand accounting for the variations. Since 
1915 annual production has steadily risen from 
22,860,048 barrels to 29,102,000 barrels for last 
year. 

By examination of the figures and chart on page 
12 , one can readily appreciate the continuing pro¬ 
ductivity of the Appalachian Field. Although sup¬ 
plying millions of barrels of petroleum annually 
since the Civil War, the Appalachian reservoir is 
by no means exhausted as yet, but on the contrary, 
as indicated above, in the opinion of geologists, will 
continue production for the next half century. 

Quality of Oil 

Crude oil drawn from the productive strata of 
the Appalachian Field commands the highest mar¬ 
ket prices. The fact that this oil is free from as¬ 
phalt and yields a higher percentage of refined pro¬ 
ducts, such as naphtha, kerosene, gasoline, etc., and 
certain high grade lubricating oils that can be pro¬ 
duced from no other crude, makes the demand for 
it excessive of that for any other grade. 






Oil Field 


Page Fifteen 


Says John D. Northrop, of the United States Geo¬ 
logical Survey in his comprehensive report “Petro¬ 
leum in 1917”: 

“The oils of the Appalachian Field are in the 
main of paraffin base, free from asphalt and objec¬ 
tionable sulphur, and they yield by ordinary refin¬ 
ing methods high percentages of gasoline and 
illuminating oils—the products in greatest de¬ 
mand.” 

Although operations in the Kentucky field have 
been on a considerable scale only during the past 
few years, and the future seems to hold promise 
of even greater activity, knowledge of the exist¬ 
ence of petroleum in Kentucky dates back to pre- 
Revolutionary War days. T. D. Weeks, in the 16th 
Annual Report of the United State Geological Sur¬ 
vey, published in 1895, says, regarding petroleum 
in Kentucky: 

“In Allen County oil springs have been known to 
exist from its earliest occupation, being found in 
the lower part of the St. Louis limestone. One of 
the springs is in the valley of Trammel Fork of 
Drake Creek, a few miles southwest of Scottsville. 
A barrel of oil was shipped to Pittsburgh some 
time before 1850.” 

Comparative Prices 

Pennsylvania and other districts of the Appala¬ 
chian Field have always commanded the highest 
price for their crude, ranging from 50 to 100% 
higher than the Mid-Continent output. For in¬ 
stance, Pennsylvania crude commands $5 a barrel, 
while the Somerset oil (of Kentucky, Ohio and 
West Virginia) is now bringing $8.25 a barrel. 
Mid-Continent oil ranks next at $8 a barrel. Oil 





Page Sixteen 


The Appalachian 



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55 



















































Oil Field 


Page Seventeen 


from the Illinois-Indiana field sells for $2.70 a bar¬ 
rel. Wyoming oil is quoted at $2 a barrel, while 
California crude sells at $1.62 a barrel and Gulf 
Coast crude at $1 a barrel. 

During the past eight years Appalachian crude 
has advanced in price more than 260%, North Lima 
crude 200%, and Mid-Continent crude 160%, show¬ 
ing the relative price advances continuous over the 
period characteristic of the great development of 
the oil industry. 

New Developments in the Kentucky- 
Tennessee Area 

A survey of present developments in the Appala¬ 
chian Field show that during the past few years 
rather extensive operations have been carried on 
in the Kentucky-Tennessee region. In general, 
these operations have been uniformly successful, 
resulting in a broad extension of the area drilled. 
Acreage in oil leases in this section of the field 
has increased from 810,503 acres in 1916 to 1,455,- 
700 acres in 1917. 

Mr. Northrop, in his report previously referred 
to, says, regarding the Kentucky-Tennessee field: 

“The promise given by Kentucky and Tennessee 
in 1916 of a substantial increase in their contribu¬ 
tion to the output of petroleum from the Appala¬ 
chian Field was admirably fulfilled. The quantity 
of oil marketed from these two states in 1917 was 
fully 150% greater than in 1916, and not less than 
3,100,356 barrels. Of this quantity Tennessee con¬ 
tributed 12,196 barrels, an output of eighteen times 
its contribution of 677 barrels in 1916. The rela¬ 
tively shallow depth of oil sands in Kentucky and 
the large area of undrilled territory apparently 





Page Eighteen 


The Appalachian 


capable of furnishing wells of moderate capacity, 
provided a combination of conditions and economy 
of operations that made that state the center of 
activity in drilling in the eastern fields.” 

The steady advance in output from these fields 
is shown by the following table giving the number 
of barrels marketed during the past twelve years. 
These statistics are taken from the latest report 
of the Department of Geology and Forestry of the 
State of Kentucky. 

Annual Output Kentucky-Tennessee Field 


1908 . 727,767 

1909 . 639,016 

1910 . 468,774 

1911 . 472,458 

1912 . 984,868 

1913 . 524,568 

1914 . 502,441 

1915 . 437,274 

1916 . 1,144,750 

1917 . 3,088,160 

1918 . 4,635,950 

1919 (estimated) . 7,500,000 


High Pecentage of Producers in Kentucky- 

Tennessee Field 

According to typical figures shown in the table 
below, from October 1919, reports of the United 
States Geological Survey, 90.40% of the wells com¬ 
pleted in the Kentucky-Tennessee field were pro¬ 
ducers. This is equivalent to the statement that 
oil men who operated in this field assumed a risk 
of only 9.60%, a comparatively small risk for any 
enterprise. 


















Oil Field 


Page Nineteen 


Comparative Drilling Percentages by States 

Oil Percent. 

Completions Wells Productive 

Kentucky-Tennessee 323 292 90.40% 


Pennsylvania . 543 394 75.33% 

Central Ohio. 118 52 44.06% 

Kansas . 297 228 76.76% 

Oklahoma . 711 461 64.84% 

North Texas. 386 325 84.19% 


Small Cost of Operations 

The small expense attending operations in the 
Kentucky field to which allusion has been made 
has been partly responsible for the great activity 
of the past few years which resulted in these large 
advances in yearly output. 

“The Oil Fields of Allen County, Kentucky,” a 
bulletin of the United States Geological Survey, 
written last year by two Government geologists, 
Eugene Wesley Shaw and Kirtley F. Mather, states: 

“As the sand lies not more than 200 feet below 
the valley bottoms, drilling is comparatively inex¬ 
pensive. The average cost of wells is about $600. 
Most of the drilling is done with machines, but 
derricks have been erected here and there, particu¬ 
larly for deep tests. The general appearance of the 
field differs markedly from those where the sand 
lies at great depth, for there is no forest of der¬ 
ricks, but instead inconspicuous pumping jacks 
scattered through the woods and fields of a some¬ 
what hilly region. As the country is not very 
rough, it is generally easy to haul drilling machin¬ 
ery to any desired point, though here and there 









Page Twenty The Appalachian 


inexpensive temporary roads have been built. It is 
also not difficult to get a supply of water and fuel 
to the wells. 

“The connecting pores of the sand are relatively 
large throughout its extent, and the oil is under 
more or less pressure from gas. Hence the oil 
flows into the wells rapidly, and there is little need 
for close drilling. ,, 

Typical in their bearing on conditions encoun¬ 
tered in this section are the activities of the Moni¬ 
tor Oil Company, operating in Allen County, the 
most productive oil region in Kentucky. This com¬ 
pany, which owns a total of 1,180 acres of leases 
situated in the famous Gainesville Pool and Half 
Way Pool, the McReynolds Pool and the Adolphus 
Pool, is reported as earning 40% on the outstand¬ 
ing stock. 


Conclusion 

So cursory a survey of the Appalachian Oil Field 
as this has necessitated the elimination of much 
interesting and important information. The facts 
presented are sufficient, however, to throw light on 
these main facts: That in this field, which is still 
a great producer after an enviable record of years, 
operations can be carried on at a minimum over¬ 
head charge owing to proximity to leading markets 
to refineries and to the seaboard, and because of 
nearness of pay sands to the surface, and that, 
furthermore, high prices paid for Appalachian 
crude give producers the advantage of a large mar¬ 
gin of profit. This field, moreover, shows a high 
percentage of successful drilling, the Kentucky 
territory, for instance, leading all oil fields in the 





Oil Field 


Page Twenty-one 


country in percentage of productive wells to the 
number of wells drilled, thus minimizing the ele¬ 
ment of risk. Expressed still more briefly, this 
field has in marked degree permanency of output, 
small risk of failure, low operating and marketing 
costs, high grade of product with attendant high 
price and steady demand. 

Recognition of these facts has today proved a 
strong stimulus to production, and it is in view of 
these elements of the situation that the recent ac¬ 
tivity in the Kentucky Oil field portends develop¬ 
ments which are certain to demand careful watch¬ 
ing by the investor. 














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